How Budget Airlines Keep Fares Low—And Still Make Money

Have you ever wondered how RyanAir can offer their insanely low fares? A new video gives a detailed breakdown of how budget airlines trim the financial fat to compete with full-priced commercial airlines.

The video, posted on YouTube channel Wendoverproductions, focuses primarily on European budget airlines. While companies in the U.S. (JetBlue, Frontier, Horizon) offer fares that are 10 or 20 percent lower than those of their full-priced competitors, European airlines like RyanAir and EasyJet turn a profit while offering fares that are half the typical price.

According to the video, the savings start with the aircraft itself. As anyone who has ever shopped at Costco can tell you, it pays to shop in bulk—which is why companies like RyanAir and JetBlue place orders for more than a hundred airplanes at a time. It’s a crafty move, because not only do they get a bulk discount, but their fleet is also composed entirely of just one type of plane, cutting down on training time for pilots and flight attendants.

They also save money with pocket-less seats—they don’t require cleaning, which cuts down on personnel cost—as well as the airports they service, which are less popular and have lower costs associated with them.

On your next RyanAir flight, your non-reclining seat might not be any more comfortable, but you’ll certainly better understand the business of budget airlines.